NC Steps Up Enforcement On Auto Insurance And Tag Possession

NC state law requires that every licensed vehicle in our state maintain continuous liability insurance in force.  This law has remained unchanged for many years but recently the NC Division of Motor Vehicles has started to change the way that they enforce this law.  And this change has caught many car owners off guard, resulting in nasty fines that were never expected by the car owner. 

The law requiring continuous liability insurance for all licensed vehicles is a good one and is designed to make sure that everyone who drives a car and puts others at risk has some way to pay for the losses that they cause.  In the past there was more flexibility in how this law was enforced, particularly for people who sold a car.  You used to be able to wait a week or so until it was convenient to run down to the tag office to turn in the tag and not risk a fine.  And we all know how this works, you sell a car and you immediately want to take it off your insurance policy and get your refund on the way to your mailbox.  The tag though is usually just a nuisance and you get around to turning it in when it is convenient for you.   That has all changed, and caught more than a few people off guard as the enforcement has been stepped up.  Now, with very few exceptions, if you have a tag in your possession even one day after your insurance has been cancelled, then you will probably have to pay the $50 fine, no questions asked.

There may be many reasons why the DMV has decided to stop going lightly on this rule.  I might speculate that perhaps the increased revenue associated with collection of these fines plays a part.  Or maybe there have been just too many uninsured vehicles out there involved in accidents and causing damages that the drivers can’t pay to fix.  Whatever the impetus behind this change, people who have become used to taking their time about turning in their tags after selling a car, will have to change their patterns or face fines.

After our office reached out to and spoke with a DMV officer, he confirmed that the DMV is more rigorously enforcing this rule and collecting more fines these days.  He also offered some pretty good advice for helping protect yourself from the system itself, even when you do turn your tags in on time.  He asked that we tell people to turn in their tags before they cancel their insurance on a car, and most importantly to ask for a receipt stating that the tag has been turned in.  This is necessary because your tag might otherwise be tossed in a box to be processed later.  This late processing might happen after you have called your auto insurance agent to remove the sold car from your policy.  If so, you would still be facing a $50 fine, even though you did everything correctly. 

At Clinard Insurance Group, we insure thousands of families all across North Carolina.  We hope that none of our clients get caught in this new fine trap.  If you would like any help with your home insurance, your auto insurance, your life insurance or even your business insurance, I hope you will give us a call, toll free, at 877-687-7557.  We look forward to helping you with all of your insurance needs.

HUD Rule Could Step On The Toes Of Homeowners Insurance Companies Meaning Higher Rates For You

Pity the North Carolina homeowners insurance marketplace.  The past year has been pretty rough.  The huge storm losses from 2011 have forced most insurance companies to dramatically raise their rates and limit which homes they are willing to insure.  Trying to buy insurance for your home without the support of your auto policy is rate suicide now.  And even with the auto insurance as support, many homeowners have had to sign the dreaded consent to rate form, giving their insurance companies the right to raise their home insurance rates far above the maximum rate allowed by the state.    And now, the home insurance marketplace faces another ratemaking hurdle – The new HUD rule and the unkown impact that it might have on the insurance industry’s underwriting practices.

This new HUD rule is called the disparate impact rule, and it would expand the Fair Housing Acts discriminatory effects standard and how it applies to actions that have discriminatory effects on minority groups.  Simply state, this new rule would hold companies responsible for policies that result in discriminatory effects on minorities whether or not there was ever any intention to discriminate against them as minorities.  What this could mean, is that home insurance rates might be held to be discriminatory and if so, then this could have enormous impacts on homeowners rates in North Carolina.

When it comes to pricing a homeowners insurance policy for your home, your insurance company will study many different factors that are individual to your specific house and you as the owner.   These factors can be as diverse as the quality of fire protection services are offered in your area to your credit score to your past claims history.   The very nature of insurance rate making is to isolate the high risk home from the lower risk ones in order to price each policy most appropriately.  By their very nature, many of these rate making tools could be seen to have a discriminatory effect on all kinds of different groups of people. All of these factors along with many others that are unique to the house itself as well as the life and attitudes of the home owner go into the process of determining a specific price for insurance for that home and that customer.  But what if the insurance company was unable to use some or all of this information to determine their rates for a home because their methodology could be seen as discriminatory against some particular minority?

  

A rule of this nature could limit the ability of insurance companies to provide more risk specific rates and this could result in an insurance marketplace with two flaws that will force upward pressure on pricing for all insurance buyers.  First of all, if we strip the insurance company’s ability to underwrite a specific location or area for risks that are unique to that location or area, then we will be forcing them to raise the rates on all other homes in order to subsidize those that deserve a  higher rate due to their higher risk factors.  The second flaw in this approach of insuring with more unknowns is that if you limit the information that an underwriter has to evaluate the risk of a home, then the underwriter will have to overestimate the risks, and thus the rate to cover this gap in knowledge about the home or its owner. In the end, this will mean that all homeowners will face higher rates.

At this point in time, we will have to wait for lawsuits to work their way through the system before we know for sure what impact this new rule will have on insurance companies and their home insurance rates.  Some feel that this rule could run afoul of the McCarran-Ferguson Act which gives states the power to regulate insurance.  Perhaps McCarran-Ferguson will protect the insurance companies and allow them to continue to discover the information that they need to create a fair rate for a specific home.   At this point we will have to wait and see what the higher courts rule as challenges to this new HUD rule wind their way through the court systems.

Clinard Insurance Group is an independent insurance agency located in Winston Salem, NC.  We insure thousands of homes all across North Carolina and it is important to us that all buyers of insurance products to be informed consumers.  If you have any questions about your home insurance, your auto insurance or your business insurance, please feel free to call us, toll free, at 877-687-7557.  We will take as much time as you need to help you understand the insurance products that buy.

Medical ID Theft – Some Facts and Figures

While the concept of identity theft is pretty well understood by most of the public, an offshoot of this problem, specifically medical identity theft is much less well understood.  Less than 15% of adults are familiar with the term medical identity theft and of that group, only 1/3 of them could correctly define medical identity.  Still worse, even those that understand the risks are for the most part unable to buy any kind of insurance protection for this risk exposure.   

If medical identity theft is not well understood, it is also grossly underappreciated by the public.  Take a look at a few rather daunting facts and figures relating to medical identity theft.  This crime victimizes some 1.5 million Americans every year.  And the costs of these attacks are now more than $30 billion.  And if this crime strikes you, then understand that the average cost of resolving a medical identity theft issue is $20,000 and the time it takes to do so averages between 4 and 6 months.  And while we are all very protective of our social security numbers, and rightly so, consider for a moment that the street value of a stolen social security number is about $1 while the street value of a stolen medical identity is $50.

There are many different scams designed to steal medical identities but we tend to group medical identity thefts into three broad categories.   

Financial medical identity theft – Someone is getting medical help using another person’s name or other information.

Criminal medical identity theft – A victim may be held responsible for the actions of another person’s criminal behavior.

Government Benefit Fraud – Someone’s medical benefits are being used by another person.

What strategies can you employ to make it less likely that you become a victim of medical identity theft?  Well, most of these are pretty easy steps and what is really required here is that you just take a little bit of time to constantly review and stay in touch with your medical paperwork.  For instance, you should carefully monitor and review all explanation of benefits letters that are sent to you by your health insurance company.  Make sure that each and every benefit listed is accurate and valid.  You can even be more proactive and go ahead and request a listing of benefits from your health insurance company and check this for accuracy.  Also, you can request a copy of current medical files from each health care provider that you use.  Move quickly to promptly correct any errors or false information that you find in any of your medical files.  Keep a close eye on your credit reports in case they show medical debts outstanding.  And you can request an accounting of disclosures from your health insurance company.

While the insurance industry is relatively silent in the area of insurance protection against this risk, there are a few insurance companies that are beginning to offer some options for protection against this type of fraud.  Check with your homeowners insurance agent to see if you can add medical identity theft insurance to your home insurance policy.  While you are at it, you may want to check and see if you can add identity theft to your policy as well.  While the number of insurance companies that provide medical identity theft protection right now is pretty small more and more insurance companies are evaluating this coverage each day and over time it may become much more of a mainstream type protection that you will be able to add to your homeowners insurance policy.

Clinard Insurance Group, located in Winston Salem, NC, currently insures thousands of families all across North Carolina.  We would love to help you with your homeowners insurance, your auto insurance, your life insurance or even your business insurance.  Please feel free to call us, toll free, at 877-687-7557.  We will take as much time as you need to help make sure that you are getting the protection that you want at a price that will pleasantly surprise you.